Macerich Company (The)

Ladies and gentlemen, thank you for standing by. Welcome to the fourth quarter 2025 Mace Rich Earnings Conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you would need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would like now to turn the conference over to Alexandra Johnstone, Vice President of Finance and Investor Relations. Please go ahead.

Thank you for joining us on the fourth quarter 2025 earnings falls. During this call, we will make certain statements that may be deemed forward-looking within the meaning of the safe harbor of the Private Securities Litigation Reform Act of 1995, including statements regarding projections, plans, or future expectations. Actual results may differ materially due to a variety of risks and uncertainties set forth in today's earnings results, supplemental, and our SEC filings. Reconciliations of non-GAAP measures to the most directly comparable GAAP measures are included in the supplemental filed on Form 8K with the SEC, which is posted in the investor section of the company's website at MesaRich.com. Joining us today are Jack Shea, President and Chief Executive Officer, Dan Swanstrom, Senior Executive Vice President and Chief Financial Officer, and Doug Healy. Senior Executive Vice President of Leasing. And with us in the room is Brad Miller, Senior Vice President of Portfolio Management. With that, I would like to turn the call over to Jack.

Thank you, Alexandra. And good afternoon and thank you for joining us. Before I begin, I want to thank the entire MAC team for their outstanding contributions throughout 2025. This was a year of significant execution and progress. made possible by the dedication and hard work of our people across the organization. 2025 was a pivotal year for the company. We entered the year with clear objectives under our path forward plan, simplifying the business, driving operational performance improvement, and reducing leverage. I'm pleased to report that we delivered against each of these pillars. Today, I'll spend time on our operational performance and leasing achievements, and then turn it over to Doug and to Dan to discuss the portfolio and balance sheet in more detail. Let me start with leasing, which continues to be the engine driving our path forward plan. For the full year, we signed 7.1 million square feet of new and renewal leases on a comparable center basis. an 85% increase over full year 2024, setting a new company record. Turning to our leasing speedometer, which tracks revenue completion percentage for all new leasing activity required to achieve our five-year plan, we are at 76% today, exceeding our 2025 year-end target of 70%. This puts us well on track for our mid-2026 target of 85% and positions us to substantially complete our new leasing objectives by year-end 2026. Importantly, we are achieving our target market rent assumptions in the plan. Another way to look at how far along we are with leasing is in terms of the new deals left to sign in our five-year plan. We are tracking a total of approximately 1,000 new deals in this plan. We now have 650 new deals open, executed, or in lease documentation. All that is remaining is 350 uncommitted new deals, totaling 1.6 million square feet, of which 150 are in the letter of intent stage. Our sign not open pipeline has grown to approximately 107 million, exceeding our 2025 year end target of 100 million. This is relative to our total cumulative snow opportunity of approximately 140 million in excess of the revenue generated in 2024. We have high confidence in achieving the full opportunity. Of the 140 million of total snow, the estimated incremental annual contribution is 30 million in 2026, 40 to 45 million in 2027, and 45 to 50 million in 2028. I'm excited about the progress we've made on our anchor initiatives. We targeted 30 anchor and big box replacements in our path forward plan, and I'm pleased to report that all 30 are now committed. We have five anchors open, five under construction, 11 executed, and nine with leases out. Consistent with the update we provided with our May rate presentation in December, these 30 anchors total 2.9 million square feet and are expected to generate approximately $750 million in annual tenant sales. More importantly, they're expected to drive traffic, extend dwell time, and catalyze in-line leasing throughout our centers. On a disposition front, we've made substantial progress toward our $2 billion goal. We've completed $1.3 billion of total mall and out parcel sales transactions to date. The team is very focused on getting the remaining mall and out parcel sold. I want to spend a moment on Crabtree, which we acquired in June. We are on track with our renovation plans and the new Dick's House of Sports store will open later this year. We were also pleased to see last month's announcement by Belk that they are consolidating consolidating their two locations at Crabtree into a full-store remodel and long-term lease extension of their flagship location at the east end of the property. Belk is a leading brand in the Carolinas, and their new store with a wine and coffee bar, personal shopper studio, and other amenities will complement the re-merchandising and leasing initiatives we have underway. We have already secured a commitment for backfilling the second Belks Anchor store with an entertainment-oriented retailer. Along with a very productive Macy's store, this solidifies the asset. Additionally, with the inline space, we have commitments on 18 new and 31 renewal leases. While we've only owned the mall since June, I believe we've already demonstrated that the platform we've built can create value. We'll continue to look forward for additional opportunities to put our platform to work. The milestones we delivered in 2025, leasing volume well ahead of plan, all 30 acres committed, 1.3 billion in dispositions completed, demonstrate that the Path Forward Plan is no longer just a plan. It's well along the way to completion across every pillar. As we enter 2026, I have tremendous confidence in our trajectory. The heavy lifting of de-risking the path forward plan is substantially complete. Our key focus areas for 2026 are one, completing the leasing pipeline of 350 additional new leases, 150 are in the LOI stage, two, solidifying the remaining 2026 lease expirations, and continuing to get ahead of the 2027 expirations. Three, getting tenants into physical spaces built out and paying rent on time. Four, completing the remaining dispositions. And five, continuing to evaluate new acquisition opportunities that are accretive to our plan and portfolio. Lastly, I want to note that we expect to provide an updated path forward plan 3.0 at Reef Week in June, and we intend to return to providing earnings guidance beginning in 2027. Doug, why don't you discuss the portfolio and leasing activity in more detail?